What’s happened at Global Logistic Properties?

GLPShares in Global Logistic Properties (SGX: MC0) plunged over 6% after a major shareholder sold a 12.5% stake in the company. The Government of Singapore Investment Corporation (GIC) is selling around 600m shares at $2.60 in the warehouse operator as part of its rebalancing activity. According to Bloomberg, GIC will still hold a 37% stake in the company after the sale.

The share sale has clearly ruffled a few market feathers. But there is a lesson here for all of us. That’s because as investors we too might need to, every now and again, look at our own portfolios to ensure that they continue to meet our long-term needs.

But how do you know when to sell a share?

It is often said that when it comes to buying and selling shares, the buying part is much easier and deciding when to sell could be a lot harder. Do you sell when the reasons for buying have disappeared? Or maybe you should sell when you think a share is no longer undervalued? Perhaps it’s when you have somewhere better for your money?

These are some of the most difficult questions for private investors to answer. In an earlier article, I looked at two reasons for selling a share. But here’s a third – portfolio management diversification.

That is quite a mouthful, I know. But essentially if you find yourself in a position where a large chunk of your portfolio is tied to one stock, one sector or one country, then you might want to think about rebalancing. It could be that the portfolio has become too tech-heavy or too property-focussed, so you might want to think about moving things around a little.

It’s probably best not to get too formulaic or professorial about these things. However, some investors do like to have some rough guidelines about not having more than, say, x%, in a particular stock. That said, one of the best guidelines I have heard is the “sleep test”. If a particular share or company is keeping you awake at night, then chances are you could have too much riding on the investment.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.